The Sufi Path is a process of amanesis (remembrance, realization). In pre-eternity, God asked the spirits: Alastu bi Rabikum (Am I not your Lord)? When we come into this material existence, we forget about pre-eternity and the task of life is to remember our way back to the truth concerning the nature of our essential relationship with God. This process of remembering or recollecting is known as amanesis.

Sunday, April 27, 2014

In November of 1910,
seven individuals arranged an ultra-secret meeting on Jekyll Island, off the
coast from Brunswick, Georgia ... an island that J.P. Morgan had purchased in
the not too distant past. The seven individuals were: (1) Charles Norton,
President of the First National Bank in New York, part of the J.P. Morgan
financial empire; (2) Henry Davison, a senior partner in the J.P. Morgan
Company; (3) Benjamin Strong, kingpin of J.P. Morgan’s Banker’s Trust Company;
(4) Frank Vanderlip, President of New York City’s National City Bank and who
was standing in for William Rockefeller, as well as for Kuhn, Loeb, &
Company, a powerful international investment house; (5) Paul Warburg who was
not only a partner in Kuhn, Loeb, & Company, but, as well, he was
representing the interests of the Rothschild banking empire located in France
and England, and he also was the brother of Max Warburg who oversaw the Warburg
banking empire in Germany; (6) Nelson Aldrich, Senate Chairman of the National
Monetary Commission, as well as father-in-law to John D. Rockefeller and a
business associate of J.P. Morgan; and, finally, (7) Abraham Andrew, Assistant
Secretary of the Treasury Department.

At the time, J.P. Morgan,
the Rockefellers, the Rothschild family, and the Warburg brothers collectively
controlled at least one-fourth of the world’s financial wealth. They ran a
network of banks, investment houses, and other financial entities which
influenced a great deal of commercial and political life in Europe and the
United States.

The meeting had a fairly
straightforward agenda. They wanted to find a way to take financial control of
the United States.

Mayer Rothschild once said: “Give me
control over a nation’s currency, and I care not who makes its laws.” He was
alluding to the fact that money actually tends to rule what goes on in a
country, not its laws, and, the people who were meeting on Jekyll Island were
interested in putting that principle into practice in the United States.

Up until the 1880s, most
banks in America were national banks. Those banks were chartered by the federal
government.

However, by 1910, the
year of the meeting as Jekyll Island, national banks constituted only a small
percentage of the overall number of banks in the United States. Not only were
non-national banks exploding in numbers – more than doubling in the first ten
years of the 1900s – but, by 1910, those non-national institutions constituted over
65 % of the banks in America.

The national banks tended
to be located in the big cities along the East coast. The non-national banks
were proliferating in both the western and southern portions of the United
States ... in cities both big and small.

As a result, the big
banks were losing their market share of the financial industry to the smaller,
non-national banking institutions. With a diminishing market share, the
commercial and political influence of the big banks was also being affected in
a variety of ways.

Banks – whether they were national or
non-national in character – loaned money to individuals, businesses,
organizations, and governments. Ostensibly, the money loaned out came from the
deposits made by a bank’s customers.

However, banks loaned a
great deal more money than was on deposit. Generally speaking, the banks
leveraged their deposits by a factor of 10 to 1 ... which meant that banks
tended to loan out ten dollars for each dollar that was on deposit.

These leveraged deposits
led to loans that often cycled back to the bank as deposits from the people or
businesses that had been given loans. Consequently, rather than leveraging
deposits by a factor of 10 to 1, banks could end up leveraging the original
deposits by a factor that, depending on circumstances, might rise to as much as
300 to 1.

Usually speaking, this
Potemkin arrangement worked. On average, only 3% of depositors wanted their
money back at any given time, and, therefore, the banks had an opportunity to
move the financial cards around in their game of ‘Three-card Monte.

In other words, many
banks operated in a way that induced their depositors to adopt a ‘false belief’
concerning the real financial condition of those banks at any given point in
time. For the most part, there was literally nothing in the way of actual
‘money’ to back up most of the loan and investment activities of banks.

In 1927, Sir Josiah
Stamp, head of the Bank of England, admitted to an audience at the University
of Texas that banks – not governments – create money. Banks accomplish this
through the mechanism of debt which loans money into existence, and with
respect to this process, Sir Josiah Stamp warned the audience – apparently to
no avail – that: “... if you want to continue to be the slaves of banks and pay
the cost of your own slavery, then let bankers continue to create money and
control credit.”

Everything was a matter of accounting
gimmicks. If one took the amount of money that was actually in a given bank’s
vaults at any point in time and compared that against the amount of money that
had been loaned and invested by the bank, the two figures would be very
different from one another.

Therefore, accounting
tricks were invented to reconcile the differences. One learned how to
categorize and label financial transactions in a variety of ways to paper over
the fact that banks were largely a function of smoke and mirrors because most
of the money they loaned out or invested didn’t actually exist ... until it was
loaned or invested.

From time to time, however,
a perfect storm of political and/or economic events came together that would,
in one way or another, either move depositors to begin withdrawing their money
from the bank, or such events would lead to other forms of financial problems
for the bank. Ultimately, all roads led to the same place – namely, because a
bank had loaned out and/or invested more money than had been deposited into it,
those banks didn’t have sufficient funds on hand to meet the increasing demands
of depositors and/or other creditors.

As a result, the bank
would either have to declare a bank holiday in order to buy the time needed to
be able to come up with the money that would repay depositors what they were
owed, or the bank would have to come up with some sort of public relations spiel
to try to quell the insistence of depositors and creditors to receive the money
that was owed to them. When the foregoing stalling ploys did not work, banks
would become insolvent, and the depositors who still thought they had money in
the bank would lose out.

In short, banks were
permitted to commit fraud. They knowingly made false financial claims (e.g.,
your money is safe and will be returned to you whenever you like) that induced
people to deposit money which, when things went sour, would disappear.

For a variety of reasons
– and somewhat ironically – the foregoing sorts of panics were not necessarily
a reflection of difficult economic times but often took place under conditions
of prosperity when many people and businesses were borrowing money in order to
take advantage of prosperous times, and as a result, banks didn’t have much of
a margin with respect to on-hand reserves.

Many kinds of economic
factors might lead to the bank’s equivalent of a margin call. On those
occasions, if banks were loan/investment rich but revenue poor, the banks were
in trouble, and, therefore, so were their depositors ... they were all facing a
cash-flow or liquidity problem of one description or another.

The seven individuals who
met on Jekyll Island were interested in organizing the foregoing issues in a
manner that would be advantageous to the big banks. For instance, the Jekyll
Island seven wanted the large national banks to be able to reassert dominance
in the financial markets relative to the increasing number of non-national and,
usually, smaller banks.

Consequently, the Jekyll
Island 7 – and those they represented -- wanted to be able to exert a
considerable measure of control over the non-national banks by centralizing the
administration of the banking industry. In the process, the smaller,
non-national banks would be required to follow the rules of financial
engagement that would be introduced into, and controlled by, the banking system
in accordance with the ideas being advanced on Jekyll Island in 1910.

Perhaps, most
importantly, the members at the Jekyll Island meeting wanted to come up with a
persuasive sales pitch that would convince the American public and the members
of Congress that the whole purpose of revamping the banking industry was to
protect and serve ‘We the People’ – even though this was not the reason why the
aforementioned seven individuals had gathered together. However, in order to
accomplish this, the Jekyll Island 7 would have to convince legislators and the
public alike that the process of re-organizing the banking industry was
something other than the grab for power that it actually was.

The American people
disliked monopolies, trusts, and cartels. Therefore, the Jekyll Island 7 needed
to develop a marketing and sales strategy that would dispel that kind of
distrust by making the idea of a revamped banking system appear to be something
other than the financial cartel is was intended to be.

Consequently, banks were
to be promoted as institutions that: Enabled commerce, lowered interest rates,
and brought financial and economic stability to the American public. Yet, the
reality of banks did not change – namely, they were engaged in activities that
would fraudulently leverage other people’s money in order to make profits for
themselves.

Although the Jekyll
Island 7 were reticent with respect to what banks would get out of the plan for
a new banking system, the fact is, banks would not only be able to control many
facets of commerce by determining who would receive loans and under what
conditions, but, banks also would be able to influence the process of
government. This sort of control would enable the proposed banking system to
realize Mayer Rothschild’s belief that those who controlled the dynamics of
money would have priority over those who made the laws.

-----

Once the aforementioned
meetings of November 1910 had come to their conclusion, Nelson Aldrich (one of
the participants) became the point man – at least initially -- in the Jekyll
Island operation. Nelson Aldrich was a Senator, Chairman of the National
Monetary Commission, father-in-law to John Rockefeller, an associate of J.P.
Morgan, and, as well, he was the ‘whip’ for his party.

The ‘whip’ is the
individual who is responsible for keeping party members in line – either: for
or against -- with respect to legislation that is being advanced by one party
or another, and, as well, the ‘whip’ is the individual who ensures that quorums
are met, or not, when legislation is being voted on. The ‘whip’ uses various
modes of motivational pressure – whether in the form of rewards or punitive
measures – to induce party members to vote in accordance with what the leaders
of the party consider to be appropriate in any given instance of proposed
legislation.

Aldrich began to push the
Jekyll Island idea in Congress. The sitting president was William Howard Taft
who was facing an election campaign in 1912.

Taft was opposed to
Aldrich’s plan for a new banking system. Taft’s concerns revolved around the
way in which the Aldrich idea would empower private commercial interests while
leaving the federal government relatively powerless with respect to the
activities of the misleadingly named agency.

Despite bucking his party
in various ways, Taft was a fairly popular president. Economically, things were
going fairly well for many people, and Taft’s popularity reflected, in part,
the positive commercial tenor that was being manifested in many segments of
American life.

J.P. Morgan wanted the
Jekyll Island ideas passed into legislation. Taft was standing in opposition to
what Morgan desired, and, therefore, Taft had to be stopped.

Frank Munsey and George
Perkins – who were close associates of Morgan – were dispatched to persuade
Teddy Roosevelt to run against Taft – either within the Republican Party or as
a third-party candidate. As a result, the Bull Moose Party came into being.

Although Morgan initiated
the process that led to a three-party presidential race, he was not acting
alone. Other participants in the Jekyll Island meeting were also organizing
things behind the scenes, including Paul Warburg, who was supporting the
candidacy of Wilson.

In addition, National
City Bank of New York – which had been represented by Frank Vanderlip in the
Jekyll Island meetings – played a key role in the Wilson candidacy. More than
one-quarter of the money raised by Wilson came via an individual – Cleveland
Dodge – who was employed by National City Bank, the most powerful banking
concern in America at that time that also had a presence at the Jekyll Island
meeting.

Roosevelt was enticed to
run not because he necessarily could beat Taft but because he would be able to
siphon away a sufficient number of votes from the incumbent president during
the forthcoming election to be able to prevent Taft from being re-elected. The
strategy succeeded, and Woodrow Wilson won the presidential election.

Wilson won only 42% of
the popular vote. The other 52% of the electorate was divided between William
Taft and Teddy Roosevelt.

Why did the forces behind
the Jekyll Island meeting support the candidacy of a person whose party –
Democrats – had specifically indicated in its election platform that it opposed
the Aldrich Currency Bill which was proposing a new banking system. Perhaps,
they knew something that most other Democrats did not know – namely, that,
secretly, Wilson already had agreed to back the Aldrich plan if Wilson became
president.

The individual who was
responsible for getting Wilson nominated for President during the convention of
the Democrats was Colonel Edward House. As a result, he became a close
political advisor for Wilson.

Colonel House was also
the individual who introduced Wilson to the ideas of Jekyll Island. Although
Wilson had: passed the bar exam in Georgia, earned a doctorate in history and
political, become the President of Princeton University, and served as Governor
of New Jersey, by his own admission, he knew little about banking and monetary
issues.

Therefore, Wilson relied
heavily on the ‘knowledge’ of Colonel House for his ‘understanding’ of such
matters. The understanding which Wilson thereby acquired reflected the values
and beliefs of the forces behind the Jekyll Island meetings because Colonel
House was busily engaged in tutoring Wilson accordingly.

Colonel House kept a
personal journal. Entries in that journal dating from: before Wilson’s
inauguration as President, until: after the passage of the Federal Reserve Act,
indicated that he was in fairly constant contact – both directly and indirectly
-- with the financial forces that were responsible for the Jekyll Island
meetings.

Although the Aldrich
Currency Bill seemed to pass from the scene, it was actually resurrected in the
form of an amalgamation of two bills that had been introduced by, on the one
hand, Carter Glass, a congressman from Virginia, who had become the Chairman of
the House Banking and Currency Committee, and, on the other hand, a bill co-sponsored
by Senator Robert Owen who was president of a bank in Oklahoma and who had
taken several trips to Europe to learn about the idea of central banking.

Carter Glass had been
opposed to the Aldrich Currency Bill because, among other things, that proposed
legislation seemed to place a monopoly-like power in the hands of banking
concerns – especially those from New York -- and also because the Aldrich
Currency Bill did not contain adequate provisions for governmental oversight.
Glass wanted to put forth something completely different from the Aldrich plan,
but, unfortunately, Glass didn’t know anything about banking ... even though he
was the one who had been put in charge of developing a proposal that would
counter Aldrich’s ideas.

Glass enlisted the
services of Henry Willis, a professor of economics, who had been a student of
Professor Laughlin. Laughlin had a relationship with the forces behind the
Jekyll Island meetings, and, in fact, he had adopted Paul Warburg’s position
that once the Democrats came to power, Nelson Aldrich’s name should no longer
be associated with any proposed legislation concerning a revamping of the
banking industry.

When Willis began writing
the proposed bill, he enlisted the assistance of his old mentor, Professor
Laughlin. Colonel House – to whom Carter Glass had once confessed that the
congressman knew nothing about banking -- also became involved in the bill
writing process as something of a consultant.

Under the influence of
Laughlin and House, Willis wrote a bill that – as far as working principles are
concerned -- was not really all that different from the proposal which
previously had been put forth by Nelson Aldrich. As a result, although Carter
Glass had been opposed to the Aldrich plan and wanted a bill that would not
generate a monopoly-like financial monstrosity that could not be controlled by
government, Glass, instead, got Aldrich-Redux.

The banking-related bill
that had been co-sponsored by Senator Owen was slightly different from the
Glass Bill. However, Owen’s bill represented the interests of bankers quite
well ... as one might expect with respect to someone who was, himself, an
active banker.

When the Glass and Owen
bills were reconciled, the banking industry was well on its way to gaining
financial and monetary control of the United States. The Jekyll Island plan was
becoming a reality.

Through a strategy of
reverse psychology, many of the financial interests represented at the Jekyll
Island meetings, began, publically, to denigrate the Glass-Owen Bill. For
example, even though the proposed bill was, in all essential ways, the
second-coming of the defunct Aldrich Currency Bill, Nelson Aldrich denounced
the proposed legislation as being injurious to the principles of good banking.

Frank Vanderlip, another
participant in the Jekyll Island meetings, also attacked the proposed
legislation. He even debated Carter Glass before an audience of some 1100
businessmen, economists, and bankers in an “attempt” to stem the tide of the
Glass-Owen Bill even though more than 20 years later Vanderlip wrote an article
for The Saturday Evening Post
indicating that there weren’t really any substantial, essential differences
between the Aldrich Currency Bill which had been rejected previously and the
Glass-Owen Bill that was eventually passed into legislation in 1913.

Publically, the
impression was created that the financial interests that had arranged and
organized the Jekyll Island meetings were horrified by the Glass-Owen Bill and
felt very threatened by its provisions. Privately, those financial interests
were being given precisely what they wanted through that legislation, and,
therefore, like Br’er Rabbit, they were thrown into the briar patch of their
dreams and against which they had been ‘complaining’ so assiduously to Br’er
Fox (the media) and Br’er Bear (‘We the People’).

Within Congress, one of
the primary opponents to both the Aldrich Currency Bill and the proposed
Glass-Owen Bill was William Jennings Bryan who was a prominent leader of the
Democrats but who, as well, was a spokesman for the populist wing of that
party. Unless Bryan could be brought on board, in some fashion, the Glass-Owen
Bill was unlikely to pass.

There were several maneuvers
utilized to move Bryan in the desired direction. For instance, Bryan demanded
and ‘got’ several compromises approved in relation to the Glass-Owen Bill.

One of these compromises
concerned the issue of government oversight of the Federal Reserve network of
banks. In response to Bryan’s concerns, the idea of a Federal Reserve Board was
introduced.

The members of the
proposed agency would be appointed by the President. Moreover, through the
advice and consent of the Senate, those nominees would be vetted and, where
appropriate, approved for appointment to the Board.

On the surface, Bryan’s
concerns seemed to be addressed by the idea of the Federal Reserve Board. The
President and the Senate would be able to control who would be appointed to
such a quasi-governmental agency.

However, the day-to-day
operations of the Board were not clearly delineated. In addition, the lines of
authority were also vague since the Board was responsible neither to the
President nor to Congress ... although its Chairman might have to come before
Congress from time to time and respond to – but not necessarily answer –
questions posed to the Board’s representative.

Finally, even if
regulatory control of some kind had been present – which it wasn’t – that kind
of control is only as effective as the integrity of the individuals who are
doing the regulating permits. If those individuals happen to be orbiting within
the banking industry’s gravitational sphere of influence – as often is the case
in most regulatory dynamics in government – then, even if possible (which in
the case of the Federal Reserve Board was not the case) no real regulation
would take place.

William Jennings Bryan
believed that the creation of the Federal Reserve Board constituted a win in
the compromise-battle with respect to the issue of governmental oversight
concerning the Federal Reserve System that would come into existence through
the Glass-Owen Bill. In reality, he had lost the war.

While the Federal Reserve
Board seemed to have a public face since the appointments were done by the
President and the Senate, the reality of the Board would be completely hidden.
All decisions concerning the Federal Reserve would be made in secret and
undertaken for the purpose of benefitting private, commercial and financial interests.

Another objection voiced
by Bryan concerning the proposed Glass-Owen legislation had to do with the
identity of who actually would be issuing the currency that was being talked
about in the aforementioned Bill. Bryan wanted the national currency to be
issued by the government in accordance with the provisions of the Philadelphia
Constitution and not by private, commercial corporations ... i.e., the proposed
‘federal reserve notes’ should be ‘treasury notes’ that originated with the
Treasury Department and not with the Federal Reserve.

President Wilson summoned
Glass to the White House to discuss the crisis. Glass was told by the President
that the Federal Reserve note would actually be a government-backed currency.

When Glass responded that
the only thing backing such notes would be: A limited supply of gold reserves,
a great deal of federal debt, and the assets of the banks themselves, Glass
was, in effect, told by President Wilson not to worry and, despite appearances
to the contrary, the value of the proposed Federal Reserve note was an
obligation that was being assumed by the government.

Although President
Wilson’s understanding – undoubtedly due to the tutelage of Colonel House – was
correct with respect to the fact the United States federal government did have
an obligation with respect to backing the Federal Reserve notes, the actual
reality of the situation was a little more convoluted than President Wilson was
either admitting or understood. More specifically, under most circumstances,
the members of the Federal Reserve network were the ones who were responsible
for the value and operation of the proposed notes, and the obligation of the
government would only kick in if the Federal Reserve System broke down.

In other words, the
profits for operating the Federal Reserve System had been privatized to
commercial banks. However, the obligation for covering costs – that is, if and
when the Federal Reserve System failed – would be socialized and assumed by the
federal government and its taxpayers.

Bryan’s opposition to the
Glass-Owen Bill had been dismantled through several forms of subterfuge involving
the nature of the Federal Reserve note and the idea of the Federal Reserve
Board. His opposition was further diluted when he was nominated by President
Wilson to become Secretary of State and subsequently indicated that he was
fully in agreement with, and appreciative of, the President’s efforts to ensure
that the federal government remained fully in charge of both the issuing of
currency, as well as the oversight of banking activities.

Glass, Bryan, and Wilson
were three individuals who helped usher in the era of the Federal Reserve. They
were: dumb, dumber, and dumbest.

Just prior to the
Christmas break of 1913, Congress passed the Glass-Owen Bill into legislation.
President Wilson signed the legislation into law one day later ... which turned
over control for much that went on in the United States to private, financial
interests and was an act that Wilson would later come to confess had been a
monumental mistake.

-----

Approximately thirty
years after the Jekyll Island seven came up with their original idea, there was
another refinement introduced into the Federal Reserve System. People who
leverage other people’s money also tend to be attracted to the idea of having
the people, themselves, pay for the privilege of being fleeced by the banking
system.

Consequently, a way was
sought – and this possibility came to fruition during the presidency of
Franklin Roosevelt – that, ostensibly, would be able to protect the public –
but mostly the banking system -- against the greed and financial excesses which
some of its members were inclined to commit. For instance, why not have some
form of an insurance-like scheme – maybe called the Federal Deposit Insurance Company
or the Federal Deposit Loan Corporation -- that would reimburse depositors or
pay off bad bank loans via taxpayer money, and/or government funds, and/or
higher fees to banking customers when the irresponsibility of bankers required
the banking system to be salvaged or bailed out in one fashion or another.

However, like pretty much
everything else that is connected to the process of banking, the foregoing
insurance-like scheme is more about managing impressions rather than actually
constituting a safety net for banking customers. More specifically, the banks
utilize such a high rate of leveraging relative to deposits, that the amount of
money that has been contributed to the FDIC through bank assessments (which
are, then, used to purchase treasury bonds), is not anywhere near what is
needed to pay what depositors in banks are owed if they – or a substantial
portion of them – were to ask for their money back from a sufficiently large
number of banks ... money which the banks have fraudulently claimed to be safe,
secure, and fully returnable upon demand.

If, in a given set of
circumstances, the FDIC becomes depleted of funds, the only source to which the
FDIC can appeal is the government. In effect, this really means that if the
government decides to act in that sort of a crisis situation, then the people
are the ones who will become responsible for paying off the losses that have
arisen due to poor banking practices.

When a small bank fails,
the FDIC often will make payouts to the ‘insured’ depositors of the bank and,
then, throw the bank into the abyss of liquidation. This gives the public the
impression that the banking system works without costing that system much to
keep up ‘appearances.’

When a medium-sized bank
fails, the bank is absorbed by a larger bank -- that has been approved to
undertake that sort of venture -- and, in the process the larger bank will take
on both the liabilities and assets of the failed bank. In this way, the
public’s jitters about the safety of its money are quieted, and the banking
system doesn’t lose any of the assets that have been accumulated by those
failed banks.

Finally, when large banks
fail, they are bailed out ... this is what happened during the Savings and
Loans scandals of the 1980s, and, then again, in a much bigger way during the
financial fiascos of 2008. In the case of bailouts, big banks exploit the
people coming and going -- in other words, when profits accrue to the banks as
they leverage the deposited dollars of customers, whatever gains are acquired
through that process belong to such banks, but if losses accrue to those same
banks, then the tab is, in one way or another, often picked up by ‘We the
People.’

The foregoing three
possibilities – payout, sell-off, and bailout – are sold to the public as acts
that are protecting the public’s interests. In reality, however, whatever the
benefits are which might be directed toward the public as a result of various
acts of ‘contrition’ on the part of the banking system, those benefits are
secondary to the fact that the banking system is enabled to continue on with
being able to fraudulently leverage customer deposits for the purposes of
keeping the banking system’s gambling habits going at public’s expense.

During the Depression
Era, nearly 2000 small savings and loans banks closed shop. This led to the
FDIC legislation that, supposedly, was intended to help protect depositors from
losing money if other banks were to fail.

However, the foregoing
legislation did nothing to alter the fact that banks continued to be able to
leverage the money of their depositors. This was the very issue which had led
to the losses that brought about the foregoing legislation.

Unsurprisingly,
therefore, in the 1980s – during the savings and loans scandals – the existence
of the FDIC legislation did nothing to prevent nearly 700 more savings and
loans banks from failing. The FDIC was intended to treat symptoms – and even
then only in a very limited fashion -- but not the underlying disease.

In fact, the system of
governance was rigged – in accordance with Mayer Rothschild’s dictum concerning
the relationship between money and law -- to permit the pathogen responsible
for the foregoing kinds of financial pathology to continue circulating in
America (and elsewhere in the world). If this were not the case, then the
events leading up to 2007 and 2008 would never have occurred since the new
symptomology of those events was merely a manifestation of the same old disease
– namely, allowing private financial institutions to leverage deposits, loan, and
investments to such an extent that there was never enough actual money in the
system to cover all the bets that were being made by banks and other financial
institutions.

More than anything, the
banking system wants to be able to continue on with its addictive game-playing
behavioral disorder and, thereby, continue to control the manner in which
commerce and governance are conducted in the United States.The banking system that was devised at
Jekyll Island was the doorway through which a variety of financial interests
were able to grab hold of the reins of power in the United States.

Furthermore, as far as
the earlier noted ‘promise’ of the banking system that was proposed in 1910 is
concerned – that is, the capacity of the banking system to be able to stabilize
financial and economic aspects of American -- one should understand that the
Federal Reserve banking system – as the plan of the Jekyll Island 7
subsequently was referred to – turned out to be an abysmal failure. Its
existence – which was established in 1913 via the Federal Reserve Act – did
nothing to prevent the massive economic/financial failures of 1921 and 1929.

Moreover, the system did
nothing to resolve the ten year depression that began in 1929. In addition, the
Federal Reserve network was unable to take effective steps with respect to
preventing, or solving, the recessions of: 1953, 1957, 1969, 1971, and 1981,
nor did the Federal Reserve do anything to prevent or resolve the financial
meltdown of 2007-2008.

In effect, the banking
system, as presently conceived, is a government-enabled gambling syndicate that
claims to serve the public but primarily serves itself, first, and only
secondarily, if at all, serves the public. The banking system induces
depositors to leave money with the banks and, then, it wagers that money
according to various kinds of table games which assume the form of investments
and loans ... wagering that those bets – or investments -- will provide a
return or that their loans will yield interest and/or be paid back before too
many customers (depositors or creditors) make a margin call with respect to
alleged reserves of money that, in reality, are, for the most part,
non-existent.

If, and when, the
gambling activity of a given bank generates too many losses, then up to a point,
the Federal System will lend ‘house’ money at a discount ... money that has
been prestidigitated into existence. This exhibition of magic is done through a
sleight of hand process in which, for mere pennies on the dollar, the Federal
Reserve buys the various denominations that have been printed by the Treasury,
and, then, uses that ‘money’ – which is backed by nothing – to loan to troubled
banks ... or even to loan back to the government through, for example, the
purchase of bonds that yield interest for the banking industry or for foreign
governments in exchange for money that is backed by nothing of value but,
nevertheless, helps create a financial illusion that, among other things,
permits the government to keep operating by appearing to pay some of its bills
– e.g., servicing the debt -- while running up its overall debt load.

-----

Despite its name, the
Federal Reserve idea that was devised in 1910 and legislatively implemented in
1913 through the Federal Reserve Act is neither a federal agency – in other
words, it is run by private commercial interests, not the federal government –
nor does that banking system operate on the basis of reserves ... that is,
banks operate on the principle of leveraging deposits in order to make loans
and investments via accounting-generated ‘funds’ that are largely non-existent,
and, therefore, not held in reserve.The name given to the Federal Reserve was intended to be misleading. It
was part of the public relations ploy devised by the Jekyll Island 7 to try to
allay whatever worries and concerns the public or the legislature might have
with respect to the creation of an institution that would have so much
financial power.

The foregoing sort of
deception matches the associated duplicity that enables member banks to loan or
invest money that they don’t actually have. In fact, the ‘Federal Reserve’ name
is intended to help camouflage the actual nature of banking activity.

I am reminded of a
recurring line in one of the episodes from an old television series entitled:
‘Maverick.’ In the particular show that I have in mind, a crooked, but very
nicely dressed banker (played by John Dehner) keeps saying words to the effect
of: “If you can’t trust your banker, then who can you trust?”

The foregoing question is
intended to disarm skeptics and, in the process, serve as an act of
misdirection in which a potential customer’s attention is shaped by the
banker’s allusion to integrity, while the banker simultaneously engages in all
manner of underhanded business. The unfortunate fact of the matter is that
anyone who would resort to intentionally mislabeling a banking system (i.e.,
the Federal Reserve) while engaging in questionable, if not fraudulent,
business practices cannot be trusted ... but the whole idea of the 1910 meeting
on Jekyll Island was to come up with a scheme that would induce the American
public and their legislative representatives to trust the banking system and,
thereby, be willing to cede their – i.e., the people’s -- agency to those
institutions in a variety of ways.

Banks, for the most part,
are not really interested in assisting people to realize their sovereignty.
Banks are oriented around the issue of profits.

The last claim is not
hyperbole. Banks are corporations that are driven by court-sanctioned mandates
that require them to maximize returns for their stockholders.

Consequently, when push
comes to shove, no matter what banks might say in the way of public relations,
profits have a higher priority for them than does the sovereignty of the people
whom they allegedly are in the business of serving. For example, if an
investment in, or loan to, a business is considered to be profitable, then,
irrespective of whatever problematic impact that sort of a business might have
on the community or the environment, those considerations tend to be irrelevant
to a bank -- although, sometimes, there are exceptions to this general trend.

If the business to which
a bank is thinking about loaning money, or in which a bank is interested
investing, intends to pay low wages, with few, if any benefits, and, as well,
wants tax concessions from the community and, in addition, it’s manufacturing
process will generate toxic materials that will be released into the
environment, yet, notwithstanding the foregoing problems, the company’s
business plan and financial projections indicate that profits are likely to be
forthcoming, banks, for the most part, really don’t care about anything but
whether, or not, that kind of a business is likely to be able to provide the
bank with a stream of income.

Banks are not interested
in ensuring that ‘We the People’ will have the opportunity to: form a more
perfect union, or establish justice, or insure domestic tranquility, or provide
for the common defense, or promote the general welfare, or secure the blessings
of liberty. Unless there is a profit to be made, then the foregoing
considerations are not only irrelevant, but potentially injurious to the flow
of capital, and, if the latter possibility is the case, then, naturally, the
purposes and principles for which the Philadelphia Constitution supposedly was
ordained and established must be resisted if not halted.

Banks – along with many
other corporations -- believe that the ‘commerce clause’ in the Philadelphia
Constitution is intended to serve the profit-motive of banks. Such an
interpretation is, as pointed out earlier, antithetical to the language of the
Preamble which precedes the Philadelphia Constitution and is intended to frame
the conceptual character of the constitutional articles and sections that
follow it.

Is it possible for the
idea of a bank -- that is, an institution which assists the flow of capital via
loans and investments – to serve the needs of sovereignty? Yes, it is, but not
as banks are -- for the most part -- presently understood and constituted.

Whatever profits are made
through the activities of a bank should be shared by the community. To the
extent that a bank has shares, then the shareholders should include all the
members of a community, and not just some of them.

One doesn’t have to
nationalize banks to realize the foregoing sort of a possibility. Credit unions
are not nationalized entities, but they still manage to share their wealth with
their members.

Banks should be
relatively small, localized organizations that are owned by the community and
help serve that community’s financial needs. If banks can leverage deposits
through a process of accounting-generated money creation in order to benefit
private commercial interests, then the same principle can be used to benefit
communities.

An important dimension of
the Jekyll Island meeting in 1910 was to organize their ideas in a manner that
would make it seem almost commonsensical to permit private commercial interests
to control the flow of money. If they had been really well-intentioned in their
planning, they would have said something to the effect of: ‘Wow, we’ve got a
great idea. We have found a way for communities to both generate money and
control its flow.”

Unfortunately, the Jekyll
Island 7 understood the dynamics of the situation and wanted private,
commercial interests to be able to shape the community, not the other way
around. Keeping the Rothschild’s principle about the relationship between
money, law, and control close to their hearts, forces behind the Jekyll Island
meetings wanted to prevent communities – and the individuals within those
communities -- from having some degree of control over their own financial and
commercial destinies.

In addition to being
localized and owned by the communities in which they operate, banks should be
concerned with more than whether, or not, profits can be made from a loan or
investment. The business which is being considered for financial assistance by
a bank needs to have a commitment to serving the community that is hosting it.

Without such a
commitment, then no matter what the profit potential of a given business might
be, eventually the community, its people, and their sovereignty will be
adversely affected. If a business’ primary allegiance involves profit margins
rather than the sovereignty of people, then, sooner or later, that business
will betray the surrounding community and its people – both employees and
non-employees of that company.

In short, banks should be
institutions that help establish, protect, and enhance the sovereignty of ‘We
the People’ – both collectively and individually. Banks – as institutions that
help create and control the flow of money – have always had the capacity to be
midwives to the potential of sovereignty, but, unfortunately, they usually
chose to take the more traveled road – that which is paved with greed and
selfishness -- and, this has made all the difference to the issue of
sovereignty.

Henry Ford once observed
that: “It is well that the people of the nation do not understand our banking
and monetary system, for if they did, I believe there would be a revolution
before tomorrow morning.” Perhaps if Ford had done more to educate the people
of the United States concerning the actual nature of the banking and monetary
system, the sovereignty of ‘We the People’ – both individually and collectively
-- would have been served by a much better banking and monetary system rather
than being increasingly dismantled by the arrangement which was put into place
in 1913.

-----

Alexander Hamilton, who
loved the English government’s way of doing things, instituted plans for a
national bank early on in post-constitutional America. He wanted to monetize
debt by printing up bank notes that would be exchanged for government bonds
that would yield interest to those who held them.

Those plans were opposed
by Thomas Jefferson. To begin with, Jefferson was concerned about the manner in
which such a bank was likely to lead to problems of inflation and deflation.
However, he was even more worried about the way in which many Americans might
become impoverished through the sort of banks and corporations (i.e., ones
owned by an elite who controlled the money supply) that would be enabled by
Hamilton’s vision for a national bank ... banks and corporations that would use
their position of comparative financial advantage to eliminate competition.

In addition, Jefferson
believed that Hamilton’s bank was likely to fall under foreign control. In this
respect, his concerns were confirmed when – thanks in large part to Jefferson’s
efforts – Congress did not renew the national bank’s charter in 1811.

More specifically, during
the process of liquidating the assets of the defunct national bank, the
discovery was made that almost three-quarters of the bank’s 25,000 shares were
owned by individuals who were not American. This meant that the bank’s
operations were being heavily influenced by private, foreign, financial and
commercial interests rather than being fully dedicated to what might be best
for the sovereignty of Americans – both individually and collectively.

Jefferson didn’t want
foreign interests to control monetary and banking policy in the United States.
To accomplish this, he believed the Constitution would need to be amended so
that the government could do more than coin money to resolve monetary and
financial problems.

Several individuals –
e.g., Senators Henry Clay and John Calhoun – talked about the possibility of
having a national bank that was owned by the government and which would be
capable of developing its own credit system quite independently of private,
financial interests – foreign or domestic. However, their ideas fell by the
wayside when the Second National Bank was inaugurated in 1816 ... a bank that
would be 80% privately owned.

The initial president of
the Second National Bank was not successful. Poorly administered, the bank
produced a variety of financial and commercial disasters that created a
stagnant, if not depressed, economy littered with unemployment and
bankruptcies. The fortunes of the Second National Bank appeared to improve
under its next president, Nicholas Biddle.

A Bank Renewal Bill was
put forward in 1832 for the purpose of getting congressional approval for the
bank’s charter renewal. Andrew Jackson opposed the proposed renewal legislation.
He considered the bank to be largely a “den of vipers and thieves” ... a
“hydra-headed monster” that was devouring the financial flesh of many average
workers in America while it served the interests of the wealthy.

Jackson was up for
re-election. He ran against Henry Clay who was a proponent of national banks of
one kind or another.

Jackson won the election
and proceeded to veto the Bank Renewal Bill. However, when he instructed the
Secretary of the Treasury to transfer the government’s deposits to state banks,
the Secretary refused to comply with the directive.

The Secretary was fired.
A new Secretary of the Treasury was installed and given the same instruction
... with the same result as before.

The third time around
turned out somewhat more propitiously. That Secretary began to follow the
President’s instructions.

However, Nicholas Biddle,
the President of the Second National Bank, went into attack mode and
successfully induced a sufficient number of the Senate members to block the new
Secretary’s appointment. In addition, Biddle not only threatened to create a
depression in the United States if the bank’s charter were not renewed, but he
proceeded to both stop making new loans, while calling in outstanding loans ...
thereby bringing to fruition his previous threats.

When the country’s
economy crashed, Biddle blamed Jackson for the mess. A variety of newspapers
began to push Biddle’s version of things, but, eventually, the governor of
Pennsylvania – which hosted the Second National Bank – backed Jackson, and the
tide of battle began to turn in Jackson’s favor.

While in session during
1834, the House defeated the re-chartering proposal. In 1836, the charter for
the Second National Bank expired.

The foregoing set of
events is instructive in a variety of ways. To begin with, a corporation that
was 80% privately owned used its power to intimidate several Secretaries of the
Treasury and induce them to refuse to comply with the President’s instruction
to begin transferring government money from the Second National Bank to
different state banks.

Secondly, the same
largely privately owned bank influenced the Senate to block the appointment of
a nominated Treasury Secretary who was willing to assist Jackson in his
opposition to the Second National Bank. The bank evidently believed it had the
right to dictate national monetary and financial policy, as well as undermine
the political process.

Thirdly, in the best
tradition of ideological psychopathy, Biddle pushed the country into
depression. He didn’t care who might be harmed by his actions ... he wanted
what he wanted when he wanted it.

There was both an upside
and a downside to Jackson’s opposition to the idea of a national bank. The
upside was that a den of hydra-headed vipers and thieves had been dispensed
with, but the downside was that the banking and monetary system had been thrown
into chaos.

Banks were unregulated.
In addition, the United States was bereft of a national currency and, instead,
the country had to deal with a variety of locally-issued forms of currency.

Many banks wagered bets
on various forms of speculative enterprises via their many species of currency.
When the speculation proved faulty, the banks lost their investment, and, in
turn, customers lost their deposits.

Without a national bank,
the government was limited in what it could do without going into debt to
private financial interests. As a result, to a great extent, big construction
projects involving railroads, canals, and/or roads disappeared.

The foregoing trends were
reversed during the presidency of Abraham Lincoln. The steel industry became
established, and, as well, the idea of a continental railroad began to be
realized.

In addition, the
government began to promote free higher education through the Land Grant
College system that was instituted. As well, the West was opened up through the
Homestead Act.

A country which had been
suffering from a cash-flow problem since the demise of the Second National
Bank, and a government whose coffers had been fairly empty for, in part, the
same reason both began to generate a dynamic economy. The source of this
resurgence was, to a great extent, due to the invention of the ‘Greenback’ ...
a government issued form of fiat currency whose back was printed in green ink.

The currency was backed
by work done rather than by gold or some other underlying material asset.
Essentially, the government notes were just a receipt that acknowledged someone
had done ‘x’ amount of work or provided some sort of service, and once given or
issued to someone, those same notes could be used in exchange for payment of
various forms of work and/or services.

Via the government issued
notes, the government increased its investment in the economy by roughly 600 %.
Moreover, the government used the new currency notes to make cheap credit
available to entrepreneurs for the purpose of generating more manufacturing and
commercial enterprise.

Lincoln was not the
originator of the government fiat currency idea. However, he did recognize its
potential and -- via his Treasury Secretary, Salmon Chase -- helped bring it
into existence.

The inventor of the fiat
currency idea was Henry Carey, an economist. Carey felt that using gold bullion
to back money put those who owned gold – mostly bankers -- in the driver’s seat
as far as controlling the supply of money in any given economy was concerned.

Moreover, the value of
gold was set by a world-wide market. This meant that, in part, the value of all
gold-backed currencies would be affected by the manner in which the owners of
gold set the price of that asset.

In addition, trade
balances were settled through exchanges of gold. If a country had a negative
trade balance, the difference had to be paid in gold bullion which meant not
only that gold tended to accrue to those who exported more products/services
than they imported (for example, England), but, as well, there also would be
less gold left in the system of a net importing country to be available for
backing up the value of the national currency of that nation.

In order to address the
foregoing issues, Carey proposed the idea of a government-backed currency that
would never leave the country and, therefore, would not be subject to the
vagaries of either trade balance issues or fluctuations in the supply and price
of gold. Carey envisioned the value of the national currency to be a function
of ‘national credit’ ... a sort of faith-based system in which a government and
its people would have to trust one another with respect to the exchange of
goods and services.

In short, a country
should produce what is needed locally. Moreover, it should use non-exportable
fiat currency that facilitates localized exchanges of goods and services by
acknowledging the work that made those exchanges possible through the use of
transferable currency notes.

When money or gold leaves
a country in order to pay for imported goods, one loses money/gold while
acquiring a good or service. When money remains in the country where a good or
service is produced, then the country gets to retain the money as well as the
goods.

Free trade, via the
principle of comparative advantage, purports to be able to improve on the
foregoing situation. Unfortunately, the reality of so-called ‘free trade’ –
which is anything but free -- is that free trade is not a co-operative
enterprise but a zero-sum game in which people’s lives are used to subsidize
exchanges of money and goods that tend to disproportionately benefit the
financial interests that control the dynamics of markets because those vested
interests have induced people to adopt the delusional belief that capital in
the form of money has more value than capital in the form of human sovereignty.

Money does not finance
work. Rather, work finances money since without some amount of underlying work
being present to subsidize a given currency, then the money really has no value
or purchasing power because nothing has been produced by labor to be available
for purchase.

Monetary currency
facilitates the exchange of work. However, the real currency is not money but
work ... paper and coin currencies are redeemable in a given number of hours of
work.

In effect, money is an
accounting system. It constitutes a metric through which hours of work can be
measured and exchanged.

When money – that is,
currency – becomes divorced from the reason why it has originally came into
existence (i.e., the work for which it serves as an accounting metric), the
value of money becomes distorted in various ways. The system of credit or trust
on which it was founded erodes away, and, as a result, deflation and inflation
enter the picture.

Inflation and deflation
are not a matter, respectively, of either too much money chasing too few goods,
or too many goods chasing too little money. Inflation and deflation are a
reflection of the dysfunctional behavior which enters into an
economic/political system when the basic credit/trust between people and its
government that is necessary for that kind of a system to properly operate
disappears, and, as a result, the value of work is degraded in one way or
another.

Work is a manifestation
of life. Nobody’s hours of life are worth more or less than the hours of life
of anyone else.

When people get paid at
different rates of pay, a devaluation of the hours of someone’s life is taking
place. Profits made at the expense of an equitable evaluation of the worth of
the hours of life that have been necessary to produce a product or service is
an arbitrary process that cannot be justified.

The Legal Tender Acts of
1862 and 1863 stipulated that the money – both coins and currency – which were
issued by the government constituted legal tender for all manner of debts. In
other words, government issued money was not intended to be a proxy involving
some underlying material asset such as gold and silver for which the money
could be redeemed upon demand, but rather, it was intended to be a direct
medium of exchange.

Fifty years later, the
Glass-Owen Bill – i.e., the Federal Reserve Act – made a consortium of private
banks the issuers and controllers of money. The government and the people were
relegated, once again, to a very subordinate position in which they were
required to dance to whatever financial and monetary tune the banks decided to
play.

The golden goose – i.e.,
the Greenback fiat currency – was, to a great extent, killed by the Civil War.
The United States government issued around $400 million in government notes
during the conflict in order to pay for war supplies, the wages of soldiers,
and related services.

War-profiteering and
speculation were rampant during this period of time. Consequently, inflation
began to eat away at the value of the Greenback.

In addition, another sign
of the breakdown of the idea of a system of ‘national credit’ between the
government and its citizens was the fact that not everyone would accept Greenbacks
as a medium of exchange—a sure sign of distrust and suspicion concerning the
worth of the government’s credit in the eyes of such people. As a result,
Greenbacks had to compete with other forms of currency, and this also tended to
move the value of the government issued currency in a downward direction.

By the end of the Civil
War, the Greenback had a value of $.68 cents when measured against a gold
dollar. The value of that currency continued its downward spiral until it
earned the title of ‘not being worth a greenback dollar,’

The Greenback dollar lost
much of its value because the arrangement of trust and credit that is necessary
to enable such a currency to be able to float, rather than sink, within a
social milieu was undermined by a variety of events, and the socially
destabilizing forces of the Civil War, along with post-war reconstruction,
played a prominent role in this process. However, for as long as a relationship
of trust and credit were present between the government and its people with respect
to the value of the Greenback, an amazing economic transformation swept across
the United States.

One of the forces of
dissolution affecting the value of the Greenback was a piece of legislation
entitled: The National Banking Act. It was proposed, discussed, and passed
during the period of: 1863-1864.

Among other things, The
National Banking Act permitted national banks to issue their own currency
notes. In addition, the aforementioned Act enabled the national banks to impose
a substantial tax on the currencies issued from banks that had been chartered
by the states and, in the process, pushed the state banks to the margins of
financial viability and relevance.

Moreover, whereas the
foregoing National Banking Act permitted national banks to issue their own
currencies as they liked, Greenbacks were issued in limited numbers. As a
result, the national banks used to acquire the Greenbacks, take them out of
circulation, release their own currency notes, and, then, use those notes to
purchase government bonds for which they earned interest payable in gold, and,
in this way, their notes were perceived to be more valuable than Greenbacks
and, consequently, the latter traded at a discount relative to such bank notes.

The National Banking Act
of 1863-1864 enabled a number of private banks to come into existence. They all
were able to issue their own bank notes at will and, thereby, among other
things, compete with the Greenback in ways that were advantageous to the banks.

Between the issuing of
Greenbacks in 1861-1862 and the Federal Reserve Act of 1913, a variety of
financial interests in America were involved in a series of running battles
revolving about the issue of controlling the monetary system in the United
States -- both with respect to the structure of that system, as well as in
conjunction with the identity of the people who were to have operational
control. These battles left many commercial, financial, and social casualties
across America because almost all of the individuals who were vying for control
of the monetary system were inclined toward ideological psychopathy, and, as a
result, they tended to be indifferent to the suffering their actions caused.

Contrary to the opinion
of some, the Greenback idea -- which involved a government-issued fiat currency
-- was not inherently flawed. Private financial interests often argued that
such a fiat currency system would necessarily lead to inflation, but, inflation
only enters the picture when the worth of the hours of life of certain people –
e.g., workers – are devalued and, in the process, the monetary accounting
system becomes distorted through the activities of various financial interests
who wager the price of a currency up or down.

The Greenback idea
pointed toward the necessary elements of a socially stabilizing form of
monetary system ... one which has a potential for operating independently of
private financial interests. More specifically, such a monetary system needs:
(1) a form of social organization (e.g., a government) that has sufficient
trust from its members to enable it to issue credits that would be accepted as
a form of currency to facilitate the exchange of goods and services, and (2)
people who recognize that currency is merely an accounting system which
facilitates an exchange process and that the value or asset which backs such
currency is not capital, per se, but the work (or hours of life) of people that
brings goods and services into existence.

Unfortunately, vested
financial interests do not want a monetary system which is beyond their
control. The history of monetary systems in the United States – ranging from:
The First and Second National Banks, to: the National Banking Act of 1863-1864,
as well as the Federal Reserve Act of 1913 – all indicate that private,
financial interests have constantly been trying to gain control over the
monetary system of America, and in the process, gain control over the
sovereignty of Americans – both collectively and individually.

-----

The Greenback was not the
first time in America that the idea of a government issued fiat currency had
been explored. More than one hundred and thirty years earlier, the government
of Pennsylvania had established a government backed paper currency.

The project had been
sufficiently successful to inspire Benjamin Franklin to write a pamphlet about
the idea in 1729. Moreover, Franklin’s pamphlet was so popular that he began to
receive printing orders for paper currency from a number of colonies.

Prior to its experiment
with government-backed paper money, colonial Pennsylvania had been losing both
people and commercial enterprises. One of the causes for those losses was due
to the fact that the colony had no currency to facilitate the exchange of goods
and services in a way that permitted people and businesses to escape the skewed,
self-serving manner in which private banks controlled commercial and monetary
activity.

When colonial
Pennsylvania began to release its own fiat currencies in 1723 at a cost that
undercut the interest rates of existing financial arrangements, both individuals
and businesses began to refinance their debts to private banks with cheaper,
government issued paper money. Because the government currency was less
expensive and was intended to improve: Production, commerce, and the life of
the people -- rather than merely turn a profit on conditions favorable to the
private banks -- the economy began to thrive.

An agency within the
colonial government of Pennsylvania had taken on the functions of a bank.
Between: 1723 and the mid-1750s, that governmental agency was not only able to
loan money into existence more cheaply than banks, but, as well, it used the
interest earned from those loans to eliminate -- with the exception of import
duties on certain commodities such as liquor – most taxes in Pennsylvania, and
also managed to keep the prices of goods and services fairly stable.

According to Franklin,
the key to the whole operation was to ensure that not too much money was loaned
into existence. Loans should reflect the productive capacity of society – that
is, loans should reflect the readiness of people to use their labor to generate
a variety of goods and services that were of value to the community.

The essence of the underlying principle
is that when gold or silver – or some other ‘precious’ commodity – backed up a
currency, then production was a function of the amount of that commodity that
was available, as well as the way in which a value was set for that commodity.
However, when production – or, hours of labor – led the way, then production,
in and of itself, determined the money supply, and, as a result, the value of
money was a reflection of the status of the value of the labor or work which
made that production possible.

Because labor determined
production and because this sort of production determined the money supply,
there would always be sufficient amounts of money available to be able to
support production. The money which government loaned or spent into existence
would always balance productive capacity, and vice versa.

In 1764, Franklin boasted
– perhaps unwisely given the future course of events – to members of the Bank
of England that there were no houses for the poor in Pennsylvania. Everyone who
wanted a job had one, and this state of affairs was entirely due to the manner
in which production and money supply were kept in dynamic balance with one
another.

The foregoing facts
surprised the financial elites of England. After all, many people who ended up
in America had been among the poor and destitute in England.

Franklin had undertaken
his 1764 journey to England in order to petition the English Parliament to lift
its ban on the paper money that had been issued by various colonial governments
in New England. The ban originally had been proclaimed by King George II in
1751 and was continued under his son, King George III, who ascended to the
throne in 1752.

The ban had been placed
because English merchants and financiers – and, therefore, royalty – were
losing money due to the unsound monetary practices surrounding
government-issued fiat currencies in various colonies. Initially, the injection
of those government-issued currencies had been a stimulus to commerce, but over
time, problems began to arise.

Whereas Pennsylvania had
matched the money that it loaned and spent into existence with the productive
capacity of the people of Pennsylvania, the New England states were loaning and
spending more money into existence than could be used productively.
Consequently, the value of the paper money being issued by governments in New
England began to lose value since among other things there was nothing
available for the excess money to purchase – either in the way of labor, goods,
or services.

Idle money often leads to
speculation. Speculation tends to undermine commerce because of the manner in
which that sort of gambling activity further distorts (beyond that caused by a
mismatch between money supply and productive capacity) the relationship between
productive capacity and money supply. In the process, people lose money.

The English solution to
the tendency of certain colonies to mismanage the administration of their money
supply was to ban the different forms of paper money that were circulating in
New England. As a result, merchants and governments in New England would not
only have to borrow money from private banking interests in England in order to
finance commercial and governmental activities, but, as well, the colonists
would have to pay back those loans or taxes with gold and silver.

Once debt was created and
opened to the demands of interest, there was never enough money in existence to
pay back the debt. Interest constituted a cost that fell beyond the horizons of
the available money supply, and the people who controlled the money supply – in
the form of gold and silver – were the ones who were demanding the payment of
the additional cost of interest.

Franklin was pleading
with the English Parliament to change its manner of responding to the
mismanagement of government-issued fiat currencies in New England. His time
might have been better spent trying to convince the governments in the New
England colonies to alter the conditions under which they issued their
currencies.

The flow of
government-issued fiat currencies operates in accordance with certain
ecological principles.When the
money issued – whether spent or loaned -- returns to the government, that money
can be circulated again as well as pay for the costs of operating the system of
government that makes such loans and spending possible. However, when too much
money is issued, then in one way or another that excess money tends to fuel the
devaluation of a currency, as well as inflate prices.

When labor matches the
money supply, and vice versa, then the monetary ecology tends to thrive. When
there is too little currency or too much currency in existence, or debt and
interest rates clog the flow of commerce, then the monetary ecology tends to
break down.

Within a few years of the
English Parliament’s passing of the Currency Act of 1764, considerable poverty
began to emerge in America. The money supply had been reduced, and,
consequently, workers went idle while commerce began to fall apart because few
people had the money to pay for the goods and services being produced.

The Revolutionary War was
as much a battle against the manner in which private, financial interests in
England sought to control commercial and governmental activity in America, as
it was a battle against the way in which the East India Company, at the behest
of royalty, sought to control competition in the colonies. In both instances,
the colonists were seeking to remove their sovereignty from beneath the foot of
English oppression – governmental, financial, and corporate.

Somewhat ironically, it
was paper money that helped the Americans defeat the English. One of the first
orders of business undertaken by the Continental Congress was to issue its own
form of script ... the Continental.

Although that script
became relatively worthless by the end of the Revolutionary War because, among
other things, it had been issued as a proxy that subsequently needed to be
redeemable in hard currency (which the United States did not have) rather than
constituting a currency in its own right (and the Confederate States made the
same mistake during the Civil War), nonetheless, the Continental lasted in
value for a sufficiently long period of time (despite the extensive
counterfeiting efforts of the English) that the currency enabled the government
of the Continental Congress to fight a war against a major power without the
benefit of gold or silver and without having to tax the American people.

One of the forces that
helped to devalue the Continental was the activity of speculators. Those
individuals consisted of a variety of banking and financial interests who
engaged in a propaganda campaign to convince Americans that the Continentals
would become worthless and, then in the ensuing confusion and chaos, brought up
Continentals at discount prices that initially lowered their value, but they were
later brought back by the post-Philadelphia Constitutional government for
premium prices.

The aforementioned
speculators also forced the Continental to compete with other forms of
currencies – both hard (i.e., gold and silver) and soft (e.g., state-issued
currencies). Through that sort of competition, the value of the Continental
could be manipulated.

Once again, those
individuals who were only interested in profits and controlling the lives of
others showed their inclination to behave as ideological psychopaths. They were
more interested in the way of power than in the way of sovereignty, and, as a
result, they were indifferent to the ‘collateral’ damage that followed from
their various financial machinations concerning the Continental.

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Colonial America,
Revolutionary America, and Civil War America were not the only place and times
when people experimented with the idea of government-issued fiat currency. For
instance, an even more successful manifestation of that idea took place in
Guernsey, one of the British Channel Islands, located approximately 75 miles
south of England.

In 1816, Guernsey’s debt was about
19,000 pounds, and at that time a pound was worth a lot more than is the case
today. In addition, the average yearly net income of residents was about 600
pounds (2400 pounds a year went to service the island’s debt ... which meant
that, on average, 80% of their incomes went toward paying taxes).

The island’s
infrastructure was falling apart. Many people were leaving Guernsey.

Beginning in 1816, the
government of Guernsey began issuing interest-free government fiat currency.
The currency was issued in relatively small amounts (e.g., amounts of 4000 to
6000 pounds) and only periodically (ranging anywhere from one to four years
periods).

Much of the fiat money
was used to pay for the repair and enhancement of the island’s infrastructure.
Another effect of the money was to more than double the island’s money supply,
and, in the process, the production capacity of the island was brought into
greater equilibrium with the amount of money that was flowing through the
island.

A total of nearly 550,000
pounds of interest-free currency was issued by Guernsey through 1958. Despite
the influx of additional currency into the overall money supply, prices did not
inflate during the more than one hundred and forty years of experimentation
that were conducted between 1816 and 1958.

Through the foregoing
process of government-issued fiat currency, the government of Guernsey has
managed to become debt-free while improving its infrastructure. Furthermore,
one of the few forms of taxation that exists on the island is a simple 20% flat
tax that is not befuddled with all manner of tax loopholes ... in addition,
there are no capital gains taxes or inheritance taxes.

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Private, financial
businesses cannot accomplish what was accomplished in colonial Pennsylvania,
Revolutionary America, or Guernsey beginning in 1816. Profits, debt, and
interest that are controlled by private, financial interests do not help to:
Form a more perfect union, insure domestic tranquility, provide for the common
defense, promote the general welfare, establish justice, or secure the
blessings of liberty, but, instead, profits, debt, and interest, undermine such
possibilities by distorting the relationship between productive capacity and
the supply of money in ways that end up benefiting the few at the expense of
the many.

When done properly,
government-issued fiat currencies do not constitute a form of socialism,
communism, or capitalism. Rather, when the labor of sovereign individuals
becomes the asset which backs the currency of a given society, and when that
currency is used to facilitate the growth of the underlying asset – human
beings – so that productive capacity is permitted to come into equilibrium with
the money supply, then many constructive possibilities come into play.

Private financial
interests have spent a considerable amount of time, effort, resources, capital,
and political power to convince people otherwise. Unfortunately, that agenda of
propagandistic control has induced all too many people to cede their agency to
such forces ... forces that, more often than not, are manifested in some form
of ideological psychopathic behavior that moves in accordance with the
gravitational and delusional influence of the idea of ‘capital’ understood in
very narrow, self-serving, as well as destructive material and financial terms.